Abstract
Organic food consumption worldwide is growing. This chapter investigates this growth and outlines the major reasons behind the growth. Lack of consumer confidence in food produce from traditional channels is at the forefront of the increasing prominence of organic food consumption. A distribution channel, which has restored consumer confidence in food products, is organic cooperatives. This chapter provides a much needed definition of the organic cooperative and examines this concept through a social network lens. It further highlights the importance of close ties in the supply chain to build consumer confidence. It provides several examples of community cooperatives that use network ties and relationships to achieve success in this industry.
TopBackground
Australia has a history of alternative lifestyles and utopian experimentation (Metcalf, 1995). It is home to one of the largest markets for organic products (Australian Organic, 2014). Research indicates that organic food buyers are passionate about health, quality and environment (Pearson, Henryks, & Moffitt, 2007). These health conscious consumers in Australia represent an ideal market segment for organic products (Ogbeide, Ford, & Stringer, 2015). In addition to being health conscious, organic consumers believe organic food tastes better (Lodorfos & Dennis, 2008). Such community and consumer attributes can be related to an overarching positive attitude towards organic consumption in the region.
A review of the literature indicates that the organic food industry in Australia is an understudied subject area. Thereby, it represents an exciting opportunity for research and scholarship. This chapter contributes to the organic industry literature and deliberates on the phenomenon of cooperatives as a mechanism to support industry growth in the organic sector. Further, we attempt to show how learning from organic cooperatives with regard to market needs, can allow other small retailers (such as neighborhood food retail stores) and large businesses (such as supermarkets) to derive understanding of the organic cooperative’s operational approach. This learning can help these retailers accelerate their respective business model innovations to better meet the challenges of progressive consumer trends.
Key Terms in this Chapter
Organic Cooperative: A not-for-profit, or for-profit entity run by consumers, or an organization, that facilitates the consumption of goods that are produced organically.
Consumer Confidence: The level of confidence that consumers have in the quality and safety of food.
Bulk Selling: A producer/farmer sells most of his produce to one buyer.
Organic Food: Food produced which meets the organic standards of national or international organizations.
Supply Chain: A way of facilitating the transfer of produce from producer/farmer to end consumer.
Social Network: A network of relations, connections and contacts with others.
Consumer: An individual who purchases and consumes the produce.